We spoke to Steve Foots, CEO of Croda International to hear his views on growth in the age of uncertainty, culture, company purpose and technology . Watch the video to find out what he had to say.
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Steve Foot, CEO, Croda
On growth in the age of uncertainty
I think in the slow growth world we're living in now, we have to accept that the new level of demand is different from five years ago and it's probably going to be like this for the next three years. It brings more competition, there's more fragmentation around our markets too and because of that we have to work harder to find the growth.
For example for Croda, a lot of our business model is around innovation, so we have to keep innovation developing at pace and we have to understand our customers much more than we've ever done because their need is so important that we have to satisfy that to develop the growth.
Yes, I think that they all won't grow at the same pace, but we could point to China which is one of the fastest growing areas for Croda and it has been for the last three or four years. We would expect that to continue in the next few years. But also we can point to India and Indonesia in Asia, some of the fastest growing areas of the world for Croda and also South Africa, Brazil, Mexico.
And part of Croda's strategy has been to make sure that we invest in research and development in these markets. So we've put small laboratories in a lot of those countries I've just mentioned. And all of that is to try and capture that local demand and get that customer intimacy, so we're connected more with the local customers there.
Cultural challenges in organisations like Croda are always there. I think one of the big challenges we have is scale because when we grow and we get bigger, how do we keep the culture that we've already got and harness that in a more positive way. And it's easy to break cultures if you're not careful and that tends to come from acquisitions more than anything else or faster organic growth.
I think culture is one thing, but the values sit above that in my mind. And we have to make the right judgement calls on things and we have to be down to earth and family spirited and innovate like crazy. And I think when you go around and touch the organisation broadly, you do see that everywhere you go. The challenge in five years time is we're bigger, will you see that and that's something that occupies a lot of my mind. But as long we keep our departments relatively small, so we're breaking the company down all the time into micro businesses then I think we stand probably the best chance of protecting that culture.
On company purpose
The purpose of an organisation? In Croda, it's pretty straightforward. To innovate and have fun is the overriding metric and I mean that in a deep way. Fun for people in the organisation, we want people to drive to work feeling that they have a smile on their face, they're contributing, going back from work the same, thinking about their business.
I think underneath that of course, the most important thing is that we're adding value to our customers. And what we mean by that in specialty chemicals terms is we offer our customers something different that they need and they want, but they can't get that from anybody else. And that's crucial to us. So it's one thing innovating, but if your customers don't want it then you're wasting your time. So that's at the heart of our purpose.
And we took a decision just under two years ago, to change the organisation structure. And our issue was around customers are getting more complex to deal with and what I mean by that is they're getting more international. So the purchasing group of one customer could be in one country, R&D group in another country and perhaps production in a third country. And those countries could be over three continents. How do you get your organisation aligned fully to the customers and getting your arm around individual customers? And we have thousands of international customers.
And I think sitting above this is digitalisation. Digitalisation has transformed our industry, particularly if I look at personal care, where more and more customers now, small and medium-sized customers are becoming more influential because of digitalisation. You know, they're allowed to market their products through social media at a drop of an eyelid, quickly, spontaneously and they're responding to that in a way that we haven't seen before.
This is creating a lot of opportunities for what we call these regional dynamos and these are emerging customers in different regions that are fast becoming global players. And it's occupying a lot of the mindset of the multinationals because it's causing a lot of headaches. So a lot of these regional players are starting to take more and more business.